1. TEAM ONE MARKETING SOLUTIONS
Canty International
Case Study #2
Katie Ruddell, Chris Brown, Hayley Saulnier, Emily Lazatin, Jag Deol, Filipe Batista
2/11/2009
MKTG 1102 Set 1J, Anne Marie Webb Hughes

2. Team One Marketing Solutions 2
Canty International
Contents
Problem Identification...............................................................................................................................................3
Key Findings...............................................................................................................................................................3
Research and Case Study:......................................................................................................................................3
Assumptions ..........................................................................................................................................................3
Target Market............................................................................................................................................................4
SWOT Analysis ...........................................................................................................................................................4
Alternatives ...............................................................................................................................................................5
Solution .....................................................................................................................................................................6
Product ..................................................................................................................................................................6
Price.......................................................................................................................................................................7
Place ......................................................................................................................................................................7
Promotion..............................................................................................................................................................8
Contingency Plan ...................................................................................................................................................8
Course Concepts........................................................................................................................................................8
Apendix 1.................................................................................................................................................................10
Appendix 1A ............................................................................................................................................................12

3. Team One Marketing Solutions 3
Canty International
Problem Identification
What pricing strategy will Canty International use to offer its customers a price that focuses on the
overall value of the Decoline product?
Key Findings
Canty International is a manufacturer of wall systems and coverings for industrial and commercial uses.
Based on external research and information from the case study, we have concluded that:
Research and Case Study:
• Canty has developed a new innovative product called Decoline based on demand from industry.
• Canty is unsure what price strategy, price tactics, and selling price they should use to market Decoline.
• The wall covering market is competative. A large number of companys offer many options in design,
color and texture, but not many offer custom designed products.1
Assumptions
• Due to Canty International’s established customer base, a conservative sales forecast calls for an initial
demand of 500 M Sq / month.
• Canty International customers will pay a higher price for a product that is customizable, has a long
shelf life and meets industry safety standards.
• Canty International ability to obtain raw materials from other divisions of its firm at minimal cost and
no transport‐in cost, combined with its ability to manufacture and design in‐house, give Canty the
ability to keep costs down.
1
Marla Neufeld ‐ Interior Designer/consultant
Benjamin Moore Painting and Decorating ‐ North Burnaby 604 320 2565

4. Team One Marketing Solutions 4
Canty International
• The value or cost of any project is determined by a wide variety of factors, and is difficult to present
until a project's scope and individual customer needs have been reviewed.
Target Market
We have used the case study as a reference to determine that the requirements of the market will not
allow the Decoline panels to be an “off‐the‐shelf” product. Therefore, the company should focus on Business‐
to‐Business markets such as:
• The hotel industry ‐ It is important that Canty International maintains a good rapport with their current
client in the industry to develop more potential prospects.
• Institutes ‐ They would need specialized coverings to remain sound proof and fire‐resistant.
• Churches ‐ Use wall coverings to decorate their grand halls with artistic decor
SWOT Analysis
POSITIVE ABOUT THE COMANY NEGATIVE ABOUT THE COMPANY
STRENGTHS: WEAKNESSES:
• Decoline offers a costumed • Assumptions on product life
INTERNAL service • Limited production capacity
• Innovative design • Cost production is high compared
• Ability to provide unique to previous product
products • Production capacity is at 77%
• Already have customer base
OPPORTUNITIES: THREATS:
EXTERNAL
• Expand into US market • Competition can release a me2
• Expand to consumer markets product
• Price War

5. Alternatives
O
Ur first alternatives is market penetration pricing, a pricing strategy which sets the initial price
low during the introduction of the new product or service, with the objective of building sales, market share
and profits quickly. The first advantage is quick consumer purchasing; consumers will be more willing to
purchase the product at a low price, rather than if the price was high, and waiting for it to drop. Another
advantage is that it builds profit quickly. Because the initial price is low, consumers buy more product, in
return more profits are earned. The third advantage is low costs per unit. Since the product is selling more due
to its low price, cost of the product will drop as well as making it less expensive to produce. One disadvantage
of market penetration pricing would be a rise in demand. Because the product price is set low, demand for the
product will rise ‐ the firm must be able to supply the product to the increasing demand. Another
disadvantage would be the consumer perceived product quality. Setting a product’s price low often results in
consumers believing the product to be of poor quality. The third disadvantage would be that as competitors
use their competitive intelligence and notice Decoline’s price reduction, they will lower their prices in that
market as well.
T he second alternative is price skimming, which lists a new product or service at a high price. An
advantage of this price strategy is that the higher price will create a high quality image for
Decoline. It also allows the Canty International to lower their pricing when the threat of competition arrives.
Also, with R&D costs expected to be high, this will allow some return on the set up costs. The higher price will
also limit demand, giving the company time to build production. However, a disadvantage to price skimming is
that it may cause customers to look at the competing products, as the price is quite high. Also, if Decoline
lowers its prices too fast without significant product changes, the company could receive negative feedback.
Another negative aspect is that the customers who purchased Decoline at the raised price may feel ‘cheated’
when the price drops.

6. Team One Marketing Solutions 6
Canty International
T
he third alternative is a combination of price lining and non‐cumulative discounts. Depending on
size and features, price lining allows Canty International the luxury of offering Decoline at various
price points which makes them affordable to a wide range of customers. Offering non‐cumulative discounts
encourages larger orders, which reduces billing, order filling, shipping, and sales expenses. As quality in this
product is hard to differentiate visually, the various prices in the price lining strategy will help customers
recognize the levels of quality. However, an issue that may arise with the non‐cumulative discounts is that
loyal customers may begin believe the discounts are ‘owed’ to them after a period of time. A disadvantage of
the price lining strategy is that customers may opt for the base price product if the quality of the premium
product is not advertised properly. Canty International also faces the risk of having their competitor enter the
market with market penetration pricing, and stealing the market share for this product.
Solution
We recommend that Canty International offer a combination of price lining with non‐cumulative
quantity discount strategy in order to focus on the overall value of the Decoline.
Product
Decoline is a semi‐rigid decorative fabric panel product. The surface layer of this new product consists
of a techno‐fabric covering coupled with a lightweight but sturdy bamboo fibre core. The benefits of this
techno‐fabric is that it is abrasion resistant, soil proof, and for safety reasons it is specially treated for fire
resistance. It also has a cushioning effect that allows it to filter sound. We are offering two different levels of
the Decoline product, Basic and Premium. The differences will be in texture and design, not in structural
quality.

7. Team One Marketing Solutions 7
Canty International
At the basic level, decoline customers have the option between standard colours, and textures for their
wall coverings. They will have a standard pallet of 15 colour and texture themes to decipher from.
At the premium level, customers are more involved with the design of their decoline wall covering.
They will be able to have a wider variety of selection of styles, and will not be limited to the standard theme
pallet. a A higher detail of custom prints and design will be included in this process.
Price
Decoline is a made‐to‐order product. The value and cost of a project is determined by a variety of
factors. Canty International customers have the opportunity to purchase Decoline wall coverings based on two
pricing strategies: Price Lining and Non‐Cumulative Quantity Discounts. Canty will offer Decoline in two
distinct design categories, basic and premium. These two categories have a fixed price per meter squared
based on volume. Once the customer has chosen a level of customization, they will have the ability to obtain
cash discounts based on accumulated dollar amounts2.
Place
Internally, we suggest that Canty International uses a showroom as their ‘base camp’, a point where
their new and ongoing customer can always reach them. Externally, we recommend that Canty International
invest in an up to date website, which will act at their external showroom. We also suggest the use of an
outbound sales representative, who will visit potential customers. Attending tradeshows is also a great way to
showcase their product.
2
See Apendix 1 for detailed explanation of selling price

8. Team One Marketing Solutions 8
Canty International
Promotion
For Canty International to successfully penetrate their target market they need to have a sturdy
promotional plan. We have decided that an in‐store show room would be perfect for Canty International to
show case Decoline in a face‐to‐face environment. The showroom would consist of various styles of Decoline
product that consumers can touch and feel to compare with other products. Another decision is an online 3D
showroom for consumers who wish to purchase Decoline via the convenient ways of the internet. Prior to
purchasing, to get a general idea of what the outcome of their product will look like, the 3D web showroom
will allow customers to choose a certain room and create their own customized Decoline product through the
available shapes, sizes, colours, textures, etc.
Contingency Plan
Canty international understands that not all plans work the way they expected. In the case that their
strategy of price lining combined with non‐cumulative quantity discounts does not generate sufficient
revenue, Canty International will revise its pricing strategy to a market penetration strategy. Canty will set its
pricing based on a single product with three distinct price lines based on volume3. Canty International will
drop te non‐cumulative discount tactic because of the decreased profit margins when usuing a market
penetration startegy.
Course Concepts
Can be found in SWOT Analysis:
Operational efficiency (operational excellence) ‐ Involves a firm’s focus on efficient operations and excellent
supply chain management.
3
See Apendix 1A for contingency pricing.

9. Team One Marketing Solutions 9
Canty International
Innovative ‐ The process by which ideas are transformed into new products and services that will help firms
grow.
Price war ‐ Two or more firms compete by lowering their prices that satisfy the consumer.
Can be found in Alternatives:
Competitive intelligence (CI) – CI is used by firms to collect and synthesize information about their position
with respect to their rivals. CI enables companies to anticipate market developments rather than only react to
them.
Market penetration pricing ‐ Setting the initial price low for the introduction of a new product or service to
gain market share and build sales.
Price skimming – A strategy of selling a new product at a high price that ‘innovators’ and ‘early‐adapters’ are
willing to pay. After the high price market becomes saturated, the firm generally lowers the price to capture
the next most price sensitive segment.
Noncumulative quantity discounts – A price tactic that offers a discount based on only the amount purchased
in a single order.
Price lining – A pricing strategy that sets a price ceiling and floor for an entire line, and then setting a few
other price points in between to represent distinct differences in quality.

10. Team One Marketing Solutions 10
Canty International
Apendix 1
Fixed Costs:
Supervision Expense $1080
Miscellaneous Indirect Labour $84
Inspection $165
Facility Space Expense $327
Small Tools Expense $327
Amortization Expense, Tools $42.75
Sales and Admin including Marketing Communications $4300
Budget
Total Fixed Costs Per Month: $6028.75
Variable Costs – Basic Product:
Techno Fibre $6.55/.90 = $7.28 / M Sq
Bamboo Backing $2.97/.90 = $3.3 / M Sq
Cement Product 8.3 Litres x $.96 = $.80 /Litre
$7.97/10 M
$11.38 x 10% (fluctuation in cost of $12.52
production materials)
Labour 1.84 hrs x $7.10/hr = $13/.77 $1.70 / M Sq
(fluctuation in labour output) =
$16.96/10 M
Variable Costs – Basic Product $14.22 / M Sq
Variable Cost – Premium Product:
Techno Fibre $6.55/.90 = $7.28 / M Sq
Bamboo Backing $2.97/.90 = $3.3 / M Sq
Cement Product 8.3 Litres x $.96 = $.80 / Litre
$7.97/10
$11.38 x 10% (fluctuation in cost of $12.52
production variables)
Labour 4 hrs x $7.10/hr = 28.4/.77 $3.69 / M Sq
(fluctuation in labour output) =
$36.88/10
Variable Costs – Premium Product $16.20 / M Sq

11. Team One Marketing Solutions 11
Canty International

12. Team One Marketing Solutions 12
Canty International
Basic Product:
Minimum Order Base Line Selling Price Non Cumulative
Quantity Discount
500 M Sq $26.31 / M Sq $49.99 / M Sq
1000 M Sq $20.28 / M Sq $39.99 / M Sq $24,995 – $39,989 = 2%
2000 M Sq $17.26 / M Sq $34.99 / M Sq 39,990 + = 4%
Premium Product:
Minimum Order Base Line Selling Price Non Cumulative
Quantity Discount
500 M Sq $28.25 / M Sq $59.99 / M Sq
1000 M Sq $22.23 / M Sq $44.99 / M Sq $29,995 ‐ $44,990 =2.5%
2000 M Sq $19.21 / M Sq $39.99 / M Sq $44, 989 + = 4.5%
Appendix 1A
Contingeny Pricing – Basic Product
Minimum Order Base Line Selling Price
500 M Sq $26.31 / M Sq $34.99 / M Sq
1000 M Sq $20.28 / M Sq $29.99 / M Sq
2000 M Sq $17.26 / M Sq $24.99 / M Sq